"Eight months after the Organization of the Petroleum Exporting
Countries announced a plan for its 14 members and 10 allied countries to
withhold almost 2% of the world’s oil every day to boost prices, seven
of the 11 OPEC members that pledged to cut appear to be producing more
oil than promised.

Previously,
low production costs meant OPEC members profited even when oil prices
fell. These days, members have ramped up government spending to keep
populations happy and cover military expenses, and don’t have a cushion
to let oil revenues slip. Their strained budgets can be covered only
through increasingly high prices per barrel, and if prices are low they
need to produce more."

"OPEC’s share of the global oil market has shrunk to 40% today from 55%
in the early 1970s, when its embargo on sales to the West quadrupled oil
prices in six months."

"The dynamic working against OPEC is that, collectively, its members need
the highest oil prices of any industry player—more than companies such
as
Exxon Mobil Corp.
,
Royal Dutch Shell
PLC and most U.S. shale producers, according to
Goldman Sachs."

"OPEC needs $10 to $20 a barrel more than Big Oil and U.S. exploration and production outfits"

"The U.A.E. spends only $12 to pump a barrel of oil but needs oil to sell at $67 to cover its government expenditures"

"The U.A.E. is among OPEC’s worst offenders in pumping too much oil. It has cut only about half the amount it promised"

"OPEC on Nov. 30 agreed to cut production by 1.2 million barrels a day"

"Instead, member exports in June were 120,000 barrels a day lower than October"

"Saudi and other OPEC officials once believed U.S. shale producers needed oil prices of $80 a barrel or higher to function."

"The continued production helped pay down debt while companies
reorganized. When the producers emerged from bankruptcy, new owners had
the old debt load wiped clean. With a clean slate, plumbing once
expensive shale fields became more economical. Other companies on the
ropes sold to stronger rivals that can manage the fields more
effectively or issued new shares to raise capital."

"seven of the 11 OPEC members that pledged to cut were producing more than promised"

Now passages from Free to Choose:

"Price controls on oil and other forms of energy by the U.S.government in their turn prevented information about the effectof the OPEC cartel from being transmitted accurately to usersof petroleum. The result both strengthened the OPEC cartel,by preventing a higher price from leading U.S. consumers toeconomize on the use of oil, and required the introduction ofmajor command elements in the United States in order to allocatethe scarce supply (by a Department of Energy spending in 1979about $10 billion and employing 20,000 people)."

"A monopoly can seldom be establishedwithin a country without overt and covert government assistancein the form of a tariff or some other device. It is close to im-possible to do so on a world scale. The De Beers diamond monopoly is the only one we know of that appears to have succeeded.We know of no other that has been able to exist for long withoutthe direct assistance of governments—the OPEC cartel and earlierrubber and coffee cartels being perhaps the most prominent exam-ples.And most such government-sponsored cartels have not lastedlong. They have broken down under the pressure of internationalcompetition—a fate that we believe awaits OPEC as well. In aworld of free trade, international cartels would disappear evenmore quickly. Even in a world of trade restrictions, the UnitedStates, by free trade, unilateral if necessary, could come close toeliminating any danger of significant internal monopolies."

I should point out that De Beersonce had a 90% market share and it is now 31%.